Terry McAuliffe investment looks bad, but will voters care?

The Terry McAuliffe-Associated Press episode burned fast and hot on Wednesday night, but Viriginia observers say it’s unlikely to have much of an effect on the final weeks of the race.

AP published and then retracted a story that said court documents alleged the Democratic candidate had lied to a federal official. The documents concern two men, Joseph Caramadre and associate Raymour Radhakrishnan, who pleaded guilty to identity theft and wire fraud charges in a death-benefits scheme in 2012.

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The court documents, submitted in Rhode Island court on Wednesday, did say that McAuliffe invested with Caramadre. The McAuliffe campaign says he was “one of hundreds of passive investors” and was deceived.

So in a race defined by mudslinging between two unpopular candidates, Virginia political experts said they doubt the episode will hurt McAuliffe’s lead and might even generate some sympathy for him, as long as the revelations don’t go deeper than what came out Wednesday.

“It is now a media story, more so than a campaign story,” said Peter Brown, whose responsibilities as assistant director of the Quinnipiac University Polling Institute include Virginia surveys. “And that’s how it makes it less likely to have an impact on the campaign.”

That’s not to say Republican Ken Cuccinelli is dismissing the underlying investment story — far from it. The state attorney general’s campaign has blasted McAuliffe for his investment and issued a list of questions on Thursday about the investment and McAuliffe’s knowledge, if any, of the scheme. It asked how he met Caramadre and when he invested, as well as what he believed he was investing in.

”Until all the questions are answered by McAuliffe, we can only assume there is more damaging information that will come to light,” Cuccinelli spokeswoman Anna Nix said.

Even after the AP retraction, the scheme is one that no political hopeful would want their name associated with. Caramadre and Radhakrishnan were accused of aiming to make money by signing up terminally ill and elderly people for annuities and bonds, paid out to investors after the people’s deaths to the tune of millions of dollars, according to an indictment and news reports.

McAuliffe has tried to repair some of the damage. “The allegations are horrible and he never would have invested if he knew he was being deceived,” spokesman Josh Schwerin said in a statement. McAuliffe and his campaign donated $74,000 to the American Cancer Society, Schwerin said. That amount is intended to offset the sum of campaign contributions McAuliffe received from Caramadre plus returns the candidate made from the investment, Schwerin said.

But outsiders say that since McAuliffe has managed to pull ahead in polls despite sustained attacks on his record with car company GreenTech and other issues, they don’t expect this lesser-known and somewhat complex episode to break through.

“I think people are going to add it to the list of sketchy business dealings that McAuliffe has been involved in or has been accused of being involved with,” said Geoffrey Skelley, associate editor of political newsletter Sabato’s Crystal Ball at the University of Virginia Center for Politics. “If Cuccinelli could make GreenTech matter or some of the other stuff matter, is this going to really break through if that stuff didn’t?”

“If Virginia voters were really focused on some of the business shenanigans that McAuliffe has been involved with, I’d think that’d be reflected in his poll numbers, and if anything his poll numbers have been stronger in the last couple weeks,” Skelley added.

For his part, Cuccinelli has taken criticism for accepting gifts from Star Scientific CEO Jonnie Williams in a controversy that has ensnared the incumbent governor, Republican Bob McDonnell. Cuccinelli later donated the value of the gifts to charity.

After months of warfare between the campaigns, 39 percent of voters said they view McAuliffe favorably, and 49 percent unfavorably, in a POLITICO poll released Monday. Cuccinelli received a 34 percent favorable, 56 percent unfavorable rating, reflecting Virginia voters’ bipartisan distaste in this year’s options.

To voters who do tune into this latest episode, it is simply likely to make them sour even more on the race, said Frank Shafroth, director of the Center for State and Local Leadership at George Mason University.

“I know hardly any Virginia voters who are excited about this campaign,” he said. “This is part of the reason. It’s not about what Virginia is going to look like over the next four years. … I think we’re going to see one of the lowest turnouts in modern Virginia history in the gubernatorial election.”

Based on what’s happened in the past 24 hours, McAuliffe could even end up benefitting, said Quinnipiac’s Brown, who cautioned that it’s hard to be totally certain about the impact of something like this until it plays out.

“This is a case in which, at this point, it appears the ramifications favor Mr. McAuliffe,” Brown said. “He was ahead before the story broke and the story was retracted less than two hours after it was out, so the question is how many people saw it in that time.”